• The Logic of Reciprocity: Trust, Collective Action, and Law

      Kahan, Dan (2002-12-11)
      The Logic of Collective Action has for decades supplied the logic of public policy analysis. In this pioneering application of public choice theory, Mancur Olson ele gantly punctured the premise -- shared by a diverse variety of political theories -- that individuals can be expected to act consistently with the interest of the groups to which they belong. Absent externally imposed incentives, wealth-maximizing individuals, he argued, will rarely find it in their interest to contribute to goods that benefit the group as a whole, but rather will "free ride" on the contributions that other group members make. As a result, too few individuals will contribute sufficiently, and the well-being of the group will suffer. These are the assumptions that dominate public policy analysis and ultimately public policy across a host of regulatory domains -- from tax collection to environmental conservation, from street-level policing to policing of the internet.
    • The Theory of Value Dilemma: A Critique of the Economic Analysis of Criminal Law

      Kahan, Dan (2002-12-11)
      Criminal law can justly lay claim to being the native domain of law and economics. From Bentham to Becker, no area of law has been more brightly illuminated by the radiance of economic logic. Not coincidentally, in no other area of the law has the conflict between economics and ordinary moral sensibilities been perceived to be so sharp. When we are deciding how to apportion punishment, our instinct is to look backwards: wrongdoers should be condemned in proportion to the reprehensibility of their acts. I'll call the position that punishment should flow directly from these intuitions intrinsic value retributivism. Economics, in contrast, uses the forward-looking idiom of deterrence: punishment is justified if and to the extent that it produces a desired state of affairs; if the optimal degree of punishment so derived is out synch with intuitions about the reprehensibility of a particular crime, so much the worse for those intuitions. My goal in this essay is to demonstrate that economic analysis lacks the conceptual resources needed to criticize intrinsic value retributivism in this fashion. The economic theory necessarily presupposes some theory of value that tells us what states of affairs we are trying to maximize through punishment. To construct that theory, the members of a community must consult their shared intuitions. Once a theory of value so derived is plugged into deterrence theory, however, the results won't differ in any material respect from the ones the law would produce if informed explicitly by intrinsic value retributivism. This claim, which I'll call the theory of value dilemma, can be reduced to three sub-claims. The first is that the economic analysis of criminal law depends on an externally specified theory of value; without some account of what state of affairs the law is trying to maximize, the consequentialist logic of deterrence can't get off the ground. Second, this theory of value is essentially political; that is, there's nothing internal to economic approach that justifies discounting the valuations implicit in the decisions of a democratic political community's legal institutions, and hence nothing internal to economics that forecloses political advocacy of any particular theory of value. And the third and final sub-claim is that these politically derived evaluations will, as a practical and conceptual matter, always dominate the distinctive normative components of the economic theory of deterrence. I'll discuss each of these points in turn.